An update from the office of U.S. Representative Michael E. Capuano8th Congressional District of Massachusetts

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March 11, 2010

Health Care

Dear Friends,

For over a year, Congress and the President have been working to craft comprehensive health care reform. For me, throughout this process, I have focused on how to make health care available to all Americans without damaging the quality of care in Massachusetts. I do believe we achieved that goal in the bill passed by the House. I have not yet reached a final conclusion about the bill passed by the Senate last year because it would have, in the usual course of legislative business, undergone changes in conference committee before coming to the House for a vote.

As I am sure you are aware, there was no conference committee established for this bill. House Members will now likely be asked to vote on the Senate bill without changes, making it available to the President for his signature. Congress will then vote on amendments to that legislation through a process known as reconciliation. At this writing, it is not at all clear what legislative changes will be made to the final bill. Reconciliation is a complicated and dangerous process. In this instance, it requires the House ouseto adopt the Senate bill and then trust that the Senate will pass, and the President will sign the reconciled bill that "fixes" any problems in the existing Senate bill. There is great risk in this course of action. If one or both parties refuse to commit to this approach; the Senate bill could be signed by the President as the final bill. This recent New York Times article provides a good snapshot on current thinking regarding reconciliation in the Senate.

Therefore, I have been focusing on how exactly the Senate bill affects Massachusetts before I decide how much I will leave to "trusting" the reconciliation process. Trust is hard to find in Washington these days and I will have to make that decision myself.

I am also struggling with some of the larger questions related to the Senate bill, such as the lack of a public option and how we should pay for health care. Additionally, I have some concerns that are of specific importance to me as someone who represents Massachusetts.

Described below are the most pressing concerns I have with aspects of the Senate bill that directly impact Massachusetts. As I have done throughout this process, I reached out for a wide range of opinions on the issues described below  from hospitals, community health centers and other knowledgeable sources. I am seeking their comments on the following aspects of the Senate bill and I am currently awaiting their responses. As always, I also want to hear from you. I thank you for the many thoughtful comments you have shared with me over the past year and I look forward to hearing any additional comments you'd like to share:

Early Expansion States  The House bill recognized that some states took the lead on expanding coverage to more citizens by "grandfathering" in their programs so they would not be harmed by the new federal proposal. This helps Massachusetts, since we are one of the leaders on this issue. The Senate bill does not take the general grandfathering approach but it includes language that specifically protects Massachusetts. Although the Senate language is not as generous as the House language, the Commonwealth does have some protection.

I am concerned that in reaction to other state-specific Senate language such as the now infamous "Cornhusker Kickback," legitimate state-specific Senate provisions will be dropped, which would seriously damage Massachusetts. In fact, a March 10th article in Politico raises this very question and reports that the President wants the Massachusetts language out of the Senate bill. It is my understanding that without some type of grandfathering language; Massachusetts could lose in the range of $300 million per year. I am gathering more information about this aspect of the bill to determine if my concerns are valid.

DSH cuts  Currently, Medicare and Medicaid provide extra payments to hospitals that serve higher-than-average shares of people without health insurance. These hospitals are called Disproportionate Share Hospitals, or DSH. In the 8th District for example, Boston Medical Center and Cambridge Health Alliance both depend on millions of dollars a year in DSH payments. The Senate bill would cut DSH payments by $42 Billion per year, as opposed to the $20 Billion cut proposed in the House. Such cuts, made before a new health care system is allowed to fully develop, would curtail the amount and quality of health care provided by DSH hospitals and their uninsured patients, thereby driving these sick and poor persons to other hospitals that will not be equipped or paid to handle the medical and social challenges they present. I am looking into this aspect of the Senate bill as well.

Value Index  The Senate bill includes a proposal to adopt a so-called "value index"; the House bill does not include this proposal. It would adjust the way payments to physicians and other non-hospital providers are calculated. Supporters suggest it would encourage practices that are more frugal by rewarding "low cost areas". Massachusetts is considered a "high cost area" due to various factors, including the regional cost of living, the relative poverty of the people served, and our financial commitment to educating America's next generation of doctors. There are no limits on how much a physician's payments could be reduced by this so-called "value index" and the method has never been tested at the physician level. Due to the probability of much lower payment rates to Massachusetts doctors, this proposal seems as though it would influence (1) where doctors practice (discouraging practice in Massachusetts), (2) how they treat patients in so-called "high cost areas", and (3) how many doctors will be trained in America. Absent a thorough study of the impact of this so-called "value index", it seems to me that it could seriously harm the quality of care in Massachusetts.

Super IMAC  The Senate bill contains a proposal that would shift authority to set Medicare policies and reimbursement rates from the Congress to a board appointed by the President. This proposal has been referred to as the "Super Independent Medicare Advisory Council" by many. The House bill does not contain such a proposal, although it does require formal studies on many specific initiatives to improve the quality and cost effectiveness of the American health care system. Traditionally, reimbursement rates from Medicare are based on many factors including efficiency, complexity of the medical issues, whether the provider also bears costs associated with medical education for future doctors, whether the provider engages in research that advances medicine and the cost of living in different areas. Some argue that Medicare should focus ONLY on cost containment without regard for all the other factors that affect the cost of care and that have been traditionally considered. I am concerned that if this appointed board adopts the cost-containment only approach, Massachusetts could lose BILLIONS of dollars PER YEAR. Such a loss would hurt our world-renowned medical schools, teaching hospitals, and research programs. Those losses would undermine the quality of care we provide to our own citizens and slow progress in biomedical sciences globally. To make matters worse, I am concerned that it would quickly and inevitably result in Massachusetts losing tens of thousands of jobs and would seriously undermine one of our region's economic engines. Other regions with heavy concentrations of health care would feel a similar impact, such as New York City, Philadelphia and Los Angeles. Finally, to add insult to injury, the elected representatives of the people impacted would no longer have a say in accepting, rejecting or amending any new approaches  the entire decision would be up to Presidential appointees. Moreover, I ask people who are happy to entrust these decisions to persons appointed by President Obama to remember that there will be other Presidents, with, perhaps, very different levels of commitment to medical care.

In addition to the specific concerns outlined above, I am also concerned that some of these issues simply CANNOT be "fixed" through reconciliation. For example, even if everyone agreed at this point that the so-called Super IMAC should not be implemented; the reconciliation process may not allow that change because technically the provision does not impact the budgetary aspects of the bill. I am still working on clarifying this segment of my concerns.

I am sure you have heard that there is a push to have the House vote on all of this next week. I do not know if that goal is attainable, but I must presume it is real. As with all legislation, I seek to be as well informed as possible  especially on complicated matters such as these that are so critically important to our region. As always, I welcome your thoughts on this matter  on health care reform in general or on any of the issues I have outlined above. I look forward to hearing from you and I will keep you informed regarding what I learn. Please feel free to contact my office at the phone numbers listed below, or you may email me through my website.